What’s driving up demand for second homes?

Report says trend indicative of "uneven financial recovery taking place throughout the US"

What’s driving up demand for second homes?

The demand for second homes is skyrocketing as more affluent remote workers are choosing to spend at least part of their time in holiday destinations, according to new data from Redfin.

The firm revealed that the number of buyers who locked in mortgage rates for second homes grew by a record 128% year-over-year in March 2021, marking the 10th straight month of annual growth of above 80%.

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According to Redfin, the surging interest in vacation homes is “indicative of the uneven financial recovery taking place throughout the US.”

“Wealthy Americans are likely to have held onto their jobs – many with the freedom to work remotely –and they’re earning money through a robust stock market and rising real-estate values,” Redfin said in a statement. “But people in lower income brackets are more likely to work in industries like restaurants, retail and hospitality that are still far from recovered.”

“This recession has driven wealthy and low-income Americans further and further apart, and the soaring demand for vacation homes during the pandemic is a perfect example of their unequal financial footing, with some people buying second homes and others unable to buy their first,” said Darly Fairweather, chief economist at Redfin. “Home prices just keep going up. That’s a good thing for Americans who already own one home because they can take advantage of their increased equity to buy other assets, which in some cases includes another home. But it’s bad for lower- and middle-class families, particularly those who are renters, because the barrier to homeownership is getting higher and higher.”